• Although many consumers do everything they can, sometimes bankruptcy cannot be avoided. A lot of people consider filing, but do not know what the different types of bankruptcy are and what the qualifications for filing are. A number of factors are considered to determine what type of bankruptcy you should file. They type you choose will determine what -- if any -- debts need to be paid back.
  
  

Income

• One of the first factors that is considered when reviewing a bankruptcy filing is the income of the filer. In order to qualify for a Chapter 7 bankruptcy, the filer must have a household income at or below the median income for the state in which she resides. If the household income is over the median, she will be required to take the means test to determine if there are enough funds left over after paying the allowed expenses to qualify. If a consumer does not qualify for a Chapter 7 bankruptcy, he will be forced to enter a repayment plan under a Chapter 13 bankruptcy. This plan will require that the filer has a source of income to repay the debts under the plan.
  
  

Assets

• Each bankruptcy case allows the filer to retain certain exempt assets. Exemptions may vary by state, or in some cases the filer can choose to use the federal guidelines for exempt property. If the assets of the filer are over the allowed exemption, they can be seized by the trustee and sold to repay the creditors. Exemptions are available for the equity in a primary residence, personal property, funds that are in pensions and other retirement accounts, funds received from alimony or child support payments, tools of the trade and public assistance benefits. Life insurance, disability insurance and life insurance payments for a person the filer depended on also have exemptions.
  
  

Debts

• When filing for bankruptcy, a consumer should consider whether or not the debts that are causing financial hardship are eligible for discharge. There are certain debts that are not eligible under a Chapter 7 or a Chapter 13 case. Debts such as credit card accounts, personal loans, mortgages and auto loans can be discharged. However student loans, tax liens, past due child support or alimony payments and fines fore violating the law cannot be discharged. In addition, debts that were obtained on the basis of fraud and debts for personal injury or wrongful death lawsuits caused by driving under the influence are not eligible for discharge.